FHA issued Mortgagee Letter 2024-24 modernizing requirements for a loss mitigation consultation with borrowers in default. On August 2, 2024, FHA adopted a rule modifying FHA’s requirements for meeting with delinquent borrowers. The rule is effective January 1, 2025. However, lenders and servicers may delay compliance with certain provisions until July 1, 2025. Per this Mortgagee Letter, FHA implemented the provisions of the rule into the Handbook, and provided further guidance on how to arrange, conduct, and follow up on the loss mitigation consultation with a borrower in default. Specifically, FHA:
- Provided alternative interim procedures to conduct a loss mitigation interview with a borrower in default;
- Updated prohibited fees and charges in the Servicing Fees and Charges section (III.A.1.f.ii(B));
- Updated collection communication timeline in the Early Default Intervention section – Standard (III.A.2.h.iii(B));
- Updated communication methods in the Early Default Intervention section (III.A.2.h.iv);
- Replaced face-to-face interviews with loss mitigation consultation in the Early Default Intervention section (III.A.2.h.xii);
- Renamed Assignment of Section 247 Assignments section (III.A.3.c.ii) and updated Standard (III.A.3.c.ii(A)) for Hawaiian Home Lands Mortgages (Section 247 Mortgages);
- Updated Insured Mortgages on Indian Land (Section 248 Mortgages) (III.A.3.d); and
- Updated Submission of Claim Form Parts to HUD (Claim Type 02) for Hawaiian Home Lands Mortgages (Section 247 Mortgages) (IV.A.2.b.i(C)).
The provisions of the Mortgagee Letter must be implemented on January 1, 2025. However, the Mortgagee Letter includes alternative interim procedures for engaging borrowers in default that may be utilized between January 1, 2025, through June 30, 2025.
Click to view the FHA Mortgagee Letter 2024-24: https://www.tenaco.com/wp-content/uploads/2024/12/FHA-Mortgagee-Letter-2024-24-12-04-24.pdf
Click to view the FHA Info #2024-86: https://www.tenaco.com/wp-content/uploads/2024/12/FHA-Info-2024-86.pdf
